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If there's one thing that Chicago real-estate mogul Sam Zell isn't, it's corporate. Through his long business career that dates back to the late 1960s, he has eschewed business suits or even jackets and ties for, back-in-the-day, jump suits with gold chains and, more recently, open-neck tailored shirts, pressed jeans and a baseball cap covering his now-bald pate. The 70-year-old rides a Ducati motorcycle from his Streeterville condo to work each weekday.

Corporate decorum and recourse to management jargon? Forget it. During speeches at investment and industry conferences, where Zell is much in demand because of his gravel-voiced insights, you can always count on a barnyard obscenity or two. Just catch him on YouTube in a 2008 town hall meeting after he'd bought control of the Tribune Co., when he muttered "F--- you" to a snarky comment leveled at him (disguised as a question) by an Orlando Sentinel operative. "I was reacting to the fact that she turned around and walked away from the mike while I was trying to answer her," he explains to Barron's during a recent interview in his West Loop office.

"Once I exceeded the speed limit [age 55], I stopped worrying about what people think of me." Not that he cared much before that.

"The day-to-day responsibilities of a CEO are too confining to somebody of my temperament. I need to do what I do best, develop strategy, assess risk and look for new investment opportunities," he explains.

Zell's hyperkinetic management style seems in the main to have worked, with the notable exception of his late 2007 acquisition of Tribune, owner of the Los Angeles Times, Chicago Tribune and Newsday (since sold), plus two dozen television stations. Before it's all over, the Tribune deal will likely have cost him nearly $350 million.

Sam Zell got his start fixing houses in Ann Arbor and renting them while in law school.
Photograph by Bob Stefko

He can afford it. In 2007, Zell personally made around $1 billion off the $39 billion sale of the 540 office buildings spanning the country that made up his REIT Equity Office Properties, to
Blackstone Groupbx 1.249674563915647%Blackstone Group L.P.U.S.: NYSEUSD38.89
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(BX). The sale came at the very top of the commercial real-estate market.

As a result, his net worth has barely budged in recent years, despite the massive damage wrought by the fall in U.S. commercial real estate and stocks during the Great Recession. The most recent Forbes 400 pegged his net worth at $4.7 billion.

Cushioning the blow were successes overseas, through his international private-investment company, Equity International, which currently has more than $2 billion deployed in Brazil, Colombia, China, Egypt, New Zealand and Abu Dhabi.

The epicenter of the Zell empire is an Art Deco building in Chicago's downtown area that houses some 120 employees. The atmosphere there is freewheeling and entrepreneurial. There's obviously no dress code, and everybody is on a first-name basis, including, of course, Sam.

Zell says that he motivates his people by insisting that they act like owners, rather than bureaucratic cogs. They must personally invest in the ideas that they proffer and that are approved by Zell. He invests, too, when they invest. "Skin in the game ensures total alignment of interests," he contends.

ZELL FOLLOWED A CIRCUITOUS ROUTE to celebrity and fortune. Entrepreneurial even as a teenager, every week after Jewish religious instruction he would buy all the Playboy magazines at an elevated-train newsstand in Chicago and then sell them to his classmates in suburban Highland Park at huge markups. While in the University of Michigan's law school, he fixed and rented off-campus housing to students in Ann Arbor, starting with a grubstake from his Polish immigrant father. A grain trader, Bernard Zell got his wife and Sam's older sister out of Poland in 1939, just days before the Wehrmacht attacked. "At age 40, he managed to remake his life in the United States and prosper," says his son.

After graduating in 1966, Zell practiced law at a Chicago firm for a year, but quickly grew bored and quit to do deals full-time. Backed by the late Chicago magnate Jay Pritzker, who built the Hyatt hotels chain, he developed a large condo project in Lake Tahoe. Pritzker, he says, was "the smartest guy I've ever met. He had an incredible grasp of the art of the deal."

Zell was soon on his way, scooping up lots of office, apartment and mall properties in the real-estate bust of the mid-1970s at knockdown prices, using lots of bank-loan leverage. In the 1980s, he rode the junk-bond boom, focusing on cheap, overleveraged, but attractive companies, such as the leasing concern Itel.

His highly leveraged empire almost came apart during the 1991 real-estate credit crunch. But Zell survived when the stock market turned around, because he was able to rescue his corporate empire by selling assets. He was also able, starting in 1993, to replace his short-term bank debt on his real-estate properties with permanent capital by bundling his holdings into real-estate investment trusts; no more worries about loans being called. And a number of real-estate and corporate-vulture funds he'd started with Merrill Lynch gave him the firepower to come back strong.

ZELL SEEMS WILDLY POPULAR with his employees, despite his rough edges and prankster personality. He loves to play Nerf basketball in his office, sometimes taking a shot or two during meetings.

Many of his top staff have been with him for decades, and all are invited to his mammoth birthday parties, along with hundreds of Zell's personal friends. They've been entertained over the years by the likes of Aretha Franklin, James Brown, Elton John, Paul Simon, Bette Midler, the Eagles and, in September, James Taylor.

Zell often tears up when the name of his college buddy and co-founder of the Equity Group, Robert Lurie, comes up. Something of an alter-ego for Zell, Lurie died of cancer in 1990, throwing Zell, by his own admission, into emotional despond. A large picture of Lurie, a Woody Allen lookalike, graces a wall of Zell's office.

Back in the '90s, Zell quietly intervened when one of his finance executives became incapacitated by acute alcoholism. He nudged the woman into rehab at a local hospital, and personally supervised her treatment and recovery program. She ultimately relapsed and died, but not before leaving Zell a cryptic message on his voice mail days before her passing, saying "Sam, you were right," he recalls. Barron's learned of the incident independently of Zell. Such attentiveness isn't lost on his associates.

These days, Zell is only "dabbling" in office-building real estate, despite what he sees as a nascent recovery. "I'm not just jumping up and down over the opportunities and going into my grave-dancer mode like in 1974 and the early '90s," he avers.

For one thing, there's not an oversupply of properties on offer this time around to drive prices down, because tight credit has largely choked off new construction. In addition, low interest rates have allowed banks and other lenders to carry office properties on their balance sheets, rather than being forced to blow troubled properties out.

While occupancy is rising, rents haven't risen enough to pique his interest. Likewise, he worries that some of the favorable long-term leases struck in the boom times of 2006 and 2007 will be rolling off over the next year or two. "There's clearly more capital coming into the office market than is justified by any upside opportunity," he claims.

Nor is Zell enamored of shopping malls, except, perhaps, the super-regionals that appeal to more-affluent Americans. The middle-class consumer has been hit hard, which dims the prospects of what he deems "obsolescent" concepts like big-box malls and lifestyle centers.

That being said, he still has lots of U.S. real-estate exposure, but in sectors that he fancies. His $26 billion Equity Residential is the biggest apartment REIT in the U.S., with over 400 properties in 16 states and the District of Columbia. "The housing bust has made renting a much more popular alternative," he insists. "Many no longer regard residential real estate as an investment vehicle, and renting allows them to avoid a large down payment and maintenance costs."

His other REIT, Equity Lifestyle Properties, a mobile-home and recreational-vehicle-park operator, has locations in some 30 states. Zell says that the company, which caters to the growing demographic of retirees who are looking for cheap housing alternatives, has done well even in economic downturns and periods of elevated gasoline costs. "When gas prices go up, people stay in our RV parks longer."

The failure of the Tribune deal, however, has proved both an embarrassment and distraction for Zell. For one thing, he has been savaged in the media by reporters anxious to exhibit their solidarity with their brothers. One called Zell a Visigoth who deserved to be incarcerated in San Quentin. Last year, the New York Times' David Carr mercilessly lampooned the management team that Zell had brought in to run the company, describing how, led by a former radio shock jock named Randy Michaels, the executives indulged in frat-boy, whoopee-cushion stunts.

That might've worked at Jacor Communications, a radio station roll-up company led by Michaels that netted Zell a personal profit of nearly $1.5 billion in the '90s. But the team proved an abject failure at Tribune.

Zell maintains that it wasn't the media company's $13.8 billion in debt that proved fatal. It was, instead, a 30% drop in advertising revenue in just one year that few could have foreseen. Zell says he assumed that, by giving a majority interest in the company to an employee stock-ownership plan, he would fire up the entrepreneurial instincts of the editorial folks and other employees to make more money by putting out products with more public appeal.

But most reporters and editors resisted the Zell team's efforts to promote digital offerings, resenting the time pressures imposed by the constant updates entailed by crossing the digital divide. Reporters have long preferred writing long and tendentious pieces that earn peer approval and journalism prizes to producing stories that the public wants to read. Market and business considerations usually aren't part of their motivation—something Zell would have well understood had he studied the industry more closely before plunging in.

ZELL IS NOT OUT of the legal morass yet, with various debtors in the deal squabbling among themselves and the U.S. bankruptcy judge in Delaware early last week threatening to appoint a trustee if a settlement can't be reached. But a court examiner, in a voluminous report, absolved Zell of misconduct in the disastrous deal.

Nor was he hit with any monetary penalties in the settlement of a lawsuit brought by Tribune's employee stock-ownership plan, which claimed fraudulent conveyance. And a lawsuit brought by the creditors' committee against Zell and some former shareholders of Tribune has been stayed. In any case, his future potential liability will likely be minimal, since he's already given so much at the blood bank.

These days, the thrice-married Zell shows no signs of slowing down—other than no longer staging paint-ball war games at his Sun Valley, Idaho, retreat. He professes to be having too much fun to quit. Not to mention that the flow of new deals and opportunities seems inexhaustible.